Hilton claims outlook for the year is promising, posts 192.1 m pounds as H1 profit |
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Fri, 26 Aug 2005 11:05
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LONDON: International hotels operator Hilton Group posted an H1 pretax profit of 192.1 million pounds claiming its outlook for the year remained strong. The group, which operates 400 hotels outside the United States and some 2000 plus Ladbrokes betting shops, said there were indeed cancellations after the July bomb blasts in London, but the situation is improving with more bookings for September and October.
The group's chief executive David Michels said there has been a continued recovery in the hotel business since 2001 and a rise in betting profit margins after a series of poor horse race results. "We are positive for the rest of the year, we are on the up," he said.
In spite of the performance, the group suffered on the bourses when its share prices skidded apparently because no new plans for sale of hotels were announced, poor performance by U.K. hotels and extra costs at the Ladbrokes arm. The stock was down 1 per cent. In London, its hotels saw occupancy levels drop by 2.5 percentage points in July and August.
Michels said the sell-off plan for 18 U.K. hotels is progressing. The bids will be assessed in the coming weeks and the sale will be completed by year-end. The deal is expected to bring in 400 million pounds. The group does not plan to sell off its LivingWells health clubs, which contributes 2 per cent of the company's profit. However, if there is any sensible offers, it may consider, said Michels.
Profit from hotel business went up by 11 per cent with units in France and Sweden putting up improved performances. The business covering Hilton, Scandic and Conrad brands has 70 hotels under its arm valued at 2.3 billion pounds.
Ladbrokes unit had diminished profits, down by 6.3 per cent, The unit contributes two-thirds of the group's profits. The group said the unit gained 10 million pounds from the football championships last year, but lost out at U.K. horse races, including Cheltenham, the Grand National and Epsom Derby. Some 194 Ladbrokes shops were added this year bringing the total to 2,266.
Michels is of the view that the London bombings had put off British tourists more than overseas visitors and it was too early to say whether visitor numbers would recover in September and October.
Michels said the group intends to demerge Hilton's hotels business from Ladbrokes arm in the long run, but this may happen after five years from now.
"Will it happen? For sure it will, but it will have to be for a reason that means more shareholder value and no one has come up with that reason yet," he said.
He said the group is investigating the legality of accepting U.S. customers to its poker website as Internet-based gambling is illegal in the U.S. Other online gambling sites accept American customers.
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